Business Technology

Sunday 22 April 2018

Swedish government left reeling as data leak costs two ministers their jobs

Prime Minister Stefan Lofven admitted that his country and its citizens had been exposed to risks by potential leaks of sensitive information. Pic: AP
Prime Minister Stefan Lofven admitted that his country and its citizens had been exposed to risks by potential leaks of sensitive information. Pic: AP

Johan Ahlander and Johannes Hellstrom

Sweden's political establishment was left reeling this week as the fallout from a 2015 data leak left the country's government on the brink of collapse.

The case highlights the extraordinarily high potential of data privacy failures to damage political leaders and institutions.

On Thursday, Prime Minister Stefan Lofven replaced two ministers in a bid to contain the damage and stave off an early election as he grappled with a scandal over the leaking of sensitive personal data from state databases.

His own administration remains in the balance. Faced with a political crisis over a botched IT outsourcing deal, Lofven sacrificed his interior and infrastructure ministers rather than step down or call a snap vote more than a year ahead of schedule.

But he retained Defence Minister Peter Hultqvist, defying opposition parties who had pressed for the removal of all three ministers.

The scandal involves the handling of data under a 2015 outsourcing deal between the Swedish Transport Agency and IBM Sweden.

Lofven admitted on Monday that his country and its citizens had been exposed to risks by potential leaks of sensitive information.

Among some of the details that could have been accessible outside Sweden were the registration numbers of most vehicles on land, air and sea.

Prime Minister Lofven started last week with a pledge to investigate the Swedish Transport Agency's decision to outsource its IT operations to IBM in 2015.

The agency ignored warnings from the Swedish Security Service, and sidestepped rules on outsourcing.

Romania and the Czech Republic were among countries handling the contract, with foreign personnel who didn't have Swedish security clearance gaining access to classified information.

This included data on military vehicles, protected identities and Sweden's register of drivers' licences.

Whistleblowers have raised concerns that information about vehicles used by the armed forces and the police may have ended up in the wrong hands.

The identities of some security and military personnel could also have been at risk, according to reports, although no evidence has emerged that actual harm was caused.

Hultqvist has acknowledged knowing about the affair since early 2016. But his position is bolstered by the fact he is not responsible for the Transport Agency, and the army has said it took appropriate measures early on and that the scandal has not impacted its operations.

IBM Sweden says it never discusses its dealings with clients.

The opposition parties said in a statement they would press ahead with a motion of no confidence in Hultqvist. If they win that vote, Lofven will have to remove him, which would leave the premier seriously weakened.

Although he insisted that he would not step down, Lofven finds himself struggling to preserve his minority left-green government in a fragmented political landscape where the far-right, anti-immigrant Sweden Democrats hold the balance of power.

However, he won some breathing space when the four-party opposition Alliance bloc said it would seek the confidence vote only after the summer break. Parliament is due to resume official business in September.

Referring to the threatened vote, Lofven told daily newspaper 'Dagens Nyheter': "We will handle that situation as well. I'm the country's prime minister and will handle that too."

Opposition Moderate Party leader Anna Kinberg Batra said on Twitter: "Welcome decision from Stefan Lofven that two ministers leave after the security crisis. But the reason for suspicion against Peter Hultqvist remains."

Lofven and his allies control 159 seats in parliament, while the Alliance holds 140 and the Sweden Democrats 47.

Other parties refuse to work with them, but no one is capable of forming a majority without them.

In currency markets the Swedish crown was unperturbed, trading largely unchanged against the euro after initially strengthening somewhat.

"Financial markets have taken this in stride, and I think that will continue also going forward," said Robert Bergqvist, SEB chief economist.

"The combination of a strong Swedish economy, a strong balance sheet, and the economic-political framework gives us protection against these political events. But there could possibly be somewhat more nervousness in the financial markets if problems around the state budget arise, so we need to keep an eye on that."

Sweden has enjoyed an economic boom most countries in Europe would envy. Gross domestic product grew by 3.2pc last year and is predicted to grow by 2.4pc this year. (Reuters)

Irish Independent

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